North Korea's brazen missile tests sent Japanese stocks lower Wednesday, snapping a four-day winning streak, and the dollar higher. Auto, electronics and retail shares led the market's decline.

The benchmark Nikkei 225 index dropped 114.56 points, or 0.73 percent, to finish at 15,523.94 points on the Tokyo Stock Exchange.

Under umbrellas pedestrians walk by a stock indicator in downtown Tokyo Wednesday, July 5, 2006. Japanese stocks fell Wednesday in the first trading after North Korea stunned the region with overnight missile tests. The Nikkei Stock Average of 225 issues closed at 15,523.94 points on the Tokyo Stock Exchange Wednesday, down 114.56 points, or 0.73 percent, from Tuesday.¡¡[AP]

The retreat came after a 5.05 percent gain over the four previous trading sessions amid fading worries about US interest rates and optimism about Japan's economic recovery

North Korea defied stern warnings from the United States and Japan and launched six missiles early Wednesday morning, including a long-range Taepodong-2 believed capable of reaching the United States.

While the launches sparked a harsh reaction from Japanese and other regional governments, the Tokyo stock market took the news more calmly than it did in 1998, when North Korea launched a ballistic missile over northern Japan into the Pacific Ocean.

"As it wasn't the first time to see a ballistic missile launch, the impact of the news on the Japanese shares was mild after all," said Shinko Securities equity strategist Tsuyoshi Segawa.

Chief Cabinet Secretary Shinzo Abe said he didn't believe Japan's economy would be affected by the incident.

Fujio Mitarai, head of the most powerful business lobby, the Japan Business Federation, said the communist country's missile launch was a "matter of grave concern."

Losers included Honda Motor Co., which fell 2.17 percent to 3,600 yen ($31.30) and Matsushita Electric Industrial Co., which shed 2.61 percent to 2,360 yen ($20.52). Major department store Isetan Co. posted a 2.26 percent drop to 1,989 yen ($17.30).

On the other hand, defense-releted issues advanced, with Mitsubishi Heavy Industries Ltd. gaining 0.40 percent to 496 yen ($4.31).

First-section volume fell to 1.524 billion shares, from Tuesday's 1.565 billion shares. Decliners beat advancers 1,413 to 436, with 117 issues unchanged.

The broader Topix index, which includes all shares on the market's first section, declined 13.56 points, or 0.85 percent, to 1,588.87 points.

In currencies, the dollar was trading at 115.04 yen on the Tokyo foreign exchange market at 5 p.m. (0800 GMT) Wednesday, up 0.48 yen from late European trading. The euro fell to $1.2758, from $1.2798.

Trading was closed in New York on Tuesday in observance of Independence Day.

Japan's 10-year government bond rose to 1.9750 percent, from Tuesday's finish of 1.9650 percent. Its yield fell 0.09 point to 100.20.